Back to top

Image: Bigstock

L Brands (LB) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

In the latest trading session, L Brands closed at $79.92, marking a -0.19% move from the previous day. This change lagged the S&P 500's 0.18% loss on the day.

Heading into today, shares of the owner of Victoria's Secret, Bath & Body Works and other chain stores had gained 8.13% over the past month, outpacing the Retail-Wholesale sector's loss of 3.25% and the S&P 500's gain of 2.44% in that time.

LB will be looking to display strength as it nears its next earnings release, which is expected to be August 18, 2021. In that report, analysts expect LB to post earnings of $1.29 per share. This would mark year-over-year growth of 416%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.35 billion, up 44.25% from the year-ago period.

LB's full-year Zacks Consensus Estimates are calling for earnings of $6.21 per share and revenue of $14.56 billion. These results would represent year-over-year changes of +79.48% and +22.89%, respectively.

Investors might also notice recent changes to analyst estimates for LB. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 7.17% higher. LB currently has a Zacks Rank of #2 (Buy).

Digging into valuation, LB currently has a Forward P/E ratio of 12.9. Its industry sports an average Forward P/E of 16.57, so we one might conclude that LB is trading at a discount comparatively.

Also, we should mention that LB has a PEG ratio of 0.99. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LB's industry had an average PEG ratio of 1.19 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 34, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

Published in